World Bank agency reports continued strong interest in political risk insurance

The political risk insurance arm of the World Bank Group issued $2.8 billion in new investment guarantees for its fiscal year, providing coverage for projects that support economic growth and poverty reduction.

More than half of new business, or $1.5 billion, that the Multilateral Investment Guarantee Agency (MIGA) conducted in the year ending June 30 supports investments in sub-Saharan Africa, the group said.

A large share of the new issuance there was for energy projects, the MIGA noted.

During the fiscal year, the group also launched the Conflict-Affected and Fragile Economies Facility that will use donor contributions and MIGA guarantees to insure investment projects in places affected by conflict, continuing its work in post-conflict and fragile countries.

“MIGA continues to see strong demand in the Middle East and North Africa and insured projects in Egypt, Jordan, and Libya,” the organization said in a release.

“Since the onset of the Arab Spring, MIGA has made a concerted effort to reach out to investors targeting the region to maintain and encourage FDI in this period of transition. MIGA also insured three projects in the West Bank and Gaza through its West Bank and Gaza Investment Guarantee Trust Fund,” it added.

The MIGA has also sought to support banks and financial institutions in Europe and central Asia affected by the euro-zone crisis and guaranteed several projects over the year.

Its work also included support for work in the energy and manufacturing sectors of Latin America and Asia.

“A number of the projects MIGA guaranteed this year also involved the participation of the World Bank and IFC,” the organization also said. “As all members of the World Bank Group seek for innovative ways to boost development while harnessing the resources of the private sector, MIGA has increased its product range,” it noted.

“MIGA has seen robust uptake in its non-honoring of financial obligations cover, and this year expanded its scope further to include state-owned enterprises.”